Chapter 7 Means Test
Kansas and Missouri Bankruptcy Lawyer Helps Clients with Chapter 7 Means Test
If you, like many Americans, have found yourself drowning in debt, filing for Chapter 7 bankruptcy can be the solution you and your family needs to wipe the slate clean. Kansas City Debt Relief Attorney Ronald L. Jurgeson, LLC, works with clients to determine if they are eligible for bankruptcy, and what kind of bankruptcy they qualify to file. Many clients assume that filing for Chapter 7 is the best option because it allows debtors to discharge much of their outstanding debt. While this is true, in order to be eligible for Chapter 7 bankruptcy, your household median income must be determined first, and a means test taken, to see if you qualify for this kind of bankruptcy. By contacting Ronald L. Jurgeson, he can help you determine what type of bankruptcy you actually qualify for, and what type of bankruptcy will work best for you.
What is the Chapter 7 Means Test?
The Chapter 7 means test is a way to determine the amount of money a debtor has remaining, after paying all crucial monthly expenses, which may then be used to pay creditors to get rid of debt. The means test creates a hypothetical budget based on your expenses and daily needs. Things like taxes, insurance, food, clothing, auto and health insurance, car payments, internet use, burglar alarms systems, mortgage or rent, and other important monthly payments are all included, and this allows us to determine your anticipated monthly expense budget. In this budget, savings, vacations, or contributions to 401(k) s or IRAs are not included. After the monthly expenses have been determined, the Court then subtracts these expenses from your income to see whether or not you have money left over each month to pay back creditors. If the answer is “No”, the means test has determined that you can file for Chapter 7. If the answer is “Yes” then a Chapter 13 filing will be available to you instead. In a Chapter 13 filing, a payment plan is organized to help you pay down your debts over the next three to five years.
Call Ronald L. Jurgeson today
No matter whether you pass the means test or not, it is vitally important that you contact the experienced Lee’s Summit and Kansas City area Chapter 7 attorney Ronald L. Jurgeson to determine whether you qualify for Chapter 7. Call him at (816)463-3537 today to find out how you get your finances back on track.